RBI Penalty on HDFC Bank: Important information is emerging regarding HDFC Bank, which takes care of the convenience of its customers. Meanwhile, the Reserve Bank of India has imposed a fine of ₹9.1 million on HDFC Bank for failing to comply correctly with KYC and interest rate regulations. An investigation revealed that the bank used different benchmarks for similar loans and outsourced KYC processes for some customers to third-party agencies, which is against the rules. The RBI imposed this penalty for violating specific provisions of the Banking Regulation Act. The RBI is displeased with HDFC Bank for its shortcomings in complying with legal and regulatory requirements related to “Know Your Customer.”
The RBI stated that HDFC Bank used different interest rate benchmarks for similar loans, which is against the rules. Furthermore, the bank outsourced KYC for some of its customers to third-party agencies, which is considered improper. A subsidiary of the bank was engaging in activities that are not permitted under Section 6 of the Banking Act.
The RBI conducted an audit of HDFC Bank based on its financial position as of March 31, 2024. The audit revealed several violations and issued a notice to the bank. After hearing the bank’s explanation, the RBI decided to impose a fine.
Will this impact customers?
The RBI has clearly stated that those with accounts at HDFC Bank need not worry. This step is intended to encourage banks to take regulatory compliance seriously.